EU Investigates Apple, Others for eBook Price Fixing

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Apple, along with Simon & Schuster, Harper Collins, and Penguin, are facing a European Union investigation into allegations that they acted anti-competitively to set ebook prices and lock out competition from the market.

Publishers Hachette Livre and Verlagsgruppe Georg von Holzbrinck have also been named in the investigation.

EU investigating ebook pricingThe EU is looking into Apple’s part in possible ebook price fixing in Europe

“The Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition in the EU or in the EEA,” the European Commission said in a statement. “The Commission is also examining the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books.”

The Commission didn’t say exactly how Apple is involved, although it’s a safe bet that the company’s iBookstore will end up as part of the investigation at some point. Apple uses iBookstore to sell and distribute ebooks to iPhone, iPad and iPod touch owners through the iBooks app.

Apple also helped push ebook resellers into an agency model where publishers set prices, and also managed to land deals where titles couldn’t be sold for less at other online stores. Previously, resellers purchased books at a set price, then sold the titles for what ever price they wanted.

The iPad maker is also dealing with a class action lawsuit alleging that it, along with HarperCollins, Hachette Book Group, Macmillan, Penguin, and Simon & Schuster, that alleges the publishers and Apple worked together to drive up ebook prices. The agency model is at the heart of that issue, too.

“We intend to prove that Apple needed a way to neutralize Amazon’s Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader,” said Steve Berman, the attorney representing the class action.

Apple has not commented on the EU investigation.Apple has not commented on the EU investigation.

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3 Comments

aardman

Good luck on proving collusion to force the agency model on Amazon and to raise prices.

Apple did not need to demand that the publishers drop Amazon if they want to sell through iBooks.  Apple simply offered the selling arrangement that the publishers preferred and that Amazon refused to offer.  A publisher need not coordinate its actions with Apple or another publisher to force Amazon’s hand.  They just need to sign up with Apple and tell Amazon, change your selling model or I’m outta your store.

Apple’s entry basically chipped away at Amazon’s market power in online book retailing.  Yes, it raised ebook prices but only a fool would think that Amazon will be selling books below cost forever.  Selling below cost is just a gambit to sew up an online retailing monopoly.  Once that’s achieved guess where ebook prices will be headed?  And now, given their loss-leader strategy for Kindle Fire, there should be no doubt as to what Amazon’s ultimate goals were for ebook prices.

jbruni

Doesn’t the iBookstore operate the same way as the App Store, allowing the publishers to set prices?

mhikl

jbruni, these are physics beyond my understanding. And aardman, Amazon?s accounting system stymies the same brain cells. I feel like the old man on Moonstruck: ?I?m confused?.

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